The parcel shipping giant will not renew its contract to deliver Amazon packages through its ground network. The agreement expires at the end of August. The move comes as the online behemoth, which ranks as one of the world’s biggest shippers, has been steadily building up its own shipping resources and delivery network. “This change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well to do,” FedEx said in a statement. In June, FedEx announced it would not renew its domestic air-shipping Express contract with Amazon. The company still has an agreement with Amazon for international deliveries.
First Quarter 2021 Summary
*Total reported sales of $2.4 billion, down 13% versus last year
*GAAP operating income of $55 million and net income of $53 million, or $0.95 per diluted share, versus $80 million and $45 million, or $0.84 per diluted share, respectively in the prior year
*Adjusted operating income of $91 million, down from $108 million in the first quarter of 2020; and adjusted EBITDA of $138 million, down from $157 million in the first quarter of 2020
*Adjusted net income of $68 million, or adjusted earnings per share of $1.21, versus $66 million or $1.21, respectively in the prior year
*Operating cash flow of $86 million and adjusted free cash flow of $79 million, versus $188 million and $173 million, respectively in prior year
*$1.7 billion of total available liquidity including $753 million in cash and cash equivalents
“It’s an exciting day for ODP, as we mark the continued evolution of our B2B pivot and digital transformation, drove solid quarterly results, and took the next step in unlocking shareholder value,” said Gerry Smith, chief executive officer of The ODP Corporation.
“While conditions related to COVID-19 persisted in the quarter and adverse weather temporarily impacted operations in the Southwest, the continued execution of our low-cost model drove solid operating and free cash flow results, as we continued to make meaningful progress on our strategic initiatives. We delivered our value proposition to customers at home, in the office, and through our Retail channel, which experienced strong demand, including a 35% year-over-year increase in our buy online, pick-up in store (BOPIS) offering. While COVID-19 conditions continued to impact our contract channel, we did achieve one of our highest levels of net new customer wins and are encouraged by the increased business activity and traction exiting the quarter,” he added.
“The significant progress on our B2B pivot and digital transformation initiatives have us well positioned for the future. Our digital platform business integrated BuyerQuest, our new procure-to-pay (P2P) platform, and we advanced our collaboration with Microsoft. Additionally, the supplier community continues to gain interest as they realize the broad capabilities and reach of our new digital platform. In all, we are well on our way to pursue future growth in the large and growing business commerce market.”
“Also, as we described in a separate release, we’re taking an important step to unlock shareholder value by planning a tax-free spin-off of our B2B businesses, creating two, independent, publicly-traded companies. As separate companies, we believe all stakeholders will benefit from the increased strategic focus and flexibility, aligned capital structures and growth profiles, which will enhance our prospects for long-term value creation. In support of our strategy, we are happy to announce that our Board has authorized a new $300 million stock repurchase program,” he added.
Total reported sales for the first quarter of 2021 were $2.4 billion, a decrease of 13% compared to the first quarter of 2020. The year-over-year decrease in revenue was primarily the result of fewer retail stores in service and lower sales driven by impacts related to the COVID-19 pandemic. Product sales in the first quarter were down 12% relative to the prior year period. Service revenue in the first quarter was down 19% related to lower comparable sales at CompuCom as a result of the COVID-19 outbreak and the previously disclosed malware incident, and lower sales of services in our BSD and Retail Division, both of which were negatively impacted by the COVID-19 outbreak.
The Company reported operating income of $55 million in the first quarter of 2021, compared to $80 million in the prior year period. GAAP operating results in the first quarter included a total of $36 million of charges which include $10 million of SG&A expenses related to CompuCom’s efforts to address the malware incident and restore service delivery to impacted customers, $12 million of non-cash asset impairment charges primarily related to the impairment of operating lease right-of-use (ROU) assets associated with the Company’s retail store locations, and $14 million of merger, restructuring and other operating costs primarily associated with the Maximize B2B Restructuring Plan. Net income was $53 million, or $0.95 per diluted share in the first quarter of 2021, compared to $45 million, or $0.84 per diluted share in the first quarter of 2020.
further detail at: https://investor.theodpcorp.com/news-releases/news-release-details/odp-corporation-announces-first-quarter-2021-results